Qantas (ASX:QAN) share price gains as Rex ramps up competition

Rex is launching a Brisbane to Melbourne route to fly alongside Qantas’.

| More on:
A happy woman flies with arms outstretched on her boyfriend's back on the beach at dusk.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Qantas Airways Limited (ASX: QAN) share price is in the green today despite heightened competition from another Australian airline.

Regional Express Holdings Ltd (ASX: REX) announced this morning it will add Brisbane to its domestic network.

The domestic airline’s chair stated he expects the new offering will force Qantas to drop the prices of its flights between the cities.

At the time of writing, the Qantas share price is $5.69, 0.71% higher than its previous closing price.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.27% right now. Meanwhile, the All Ordinaries Index (ASX: XAO) has gained 0.35%.

Additionally, the Rex share price has gained 5.07% to trade at $1.56 this morning.

Let’s take a closer look at what the new competition might mean for Qantas.

Qantas’ increased competition

The Qantas share price is up despite new competition taking off in Australia’s ‘golden triangle’.

Rex will be operating double-daily flights between Brisbane and Melbourne from 17 December. Ticket prices will start at sale rates of $79 each.

The airline’s launch into the lucrative market between Melbourne, Sydney, and Brisbane has been its long-stated goal.

Rex deputy chair the Honourable John Sharp AM noted the impact today’s news could have on Qantas:

Every time we’ve entered a new market, airfares have fallen dramatically as Qantas and Virgin Australia scramble to match our prices and I have no doubt this will be the case again.

Both Brisbane Airport Corporation CEO Gert-Jan de Graaff and Melbourne Airport chief of aviation Lorie Argus agree Rex’s new offering will increase competition between airlines operating the popular Australian route.

Sharp also commented that Rex offers better value for money than other low-priced airlines, such as Qantas’ Jetstar:

Rex is a full service airline so these fares represent incredible value. Unlike our competitors, Rex passengers don’t get slugged with hidden or extra costs as all fares on our domestic jet network include free 23kg checked baggage and refreshments on board.

While it’s unlikely the news is weighing on the Qantas share price today, market watchers may want to keep an eye out for more planned growth from Qantas’ domestic competitor.

Rex has ambitions to continue adding new routes to its offerings, particularly in Queensland.

Qantas share price snapshot

Right now, the Qantas share price is flat compared to this time last month.

However, it is 15% higher than it was at the start of 2021.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares

a couple at an airline ticket counter have an angry exchange with the employee behind the counter. She is leaning forward in an aggressive manner as they hold a paper ticket in their hands.
Travel Shares

Qantas share price descends as management recruited for ground-handling work

We check the latest on the airline.

Read more »

A woman looks nervous and uncertain holding a hand to her chin while looking at a paper cut out of a plane that she's holding in her other hand. representing the falling Air New Zealand share price today
Travel Shares

Why did the Flight Centre share price underperform the ASX 200 in July?

Let's fly in and examine.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Are Qantas shares worth buying ahead of this month’s earnings result?

What's ahead for Qantas?

Read more »

qantas pilot putting hands to her face as if distraught
Travel Shares

Own Flight Centre shares? Here’s why the boss is predicting more pain for the travel sector

What's going on at Flight Centre?

Read more »

A woman wearing a hat, sunglasses and a bathing suit reads the newspaper while sitting on a lounging chair that's placed in a pool in a relaxing setting.
Travel Shares

Here’s what I consider to be the very best ASX 200 share to buy in August

This ASX travel share could be a top pick this month.

Read more »

Two kids wearing pilot's goggles take flight down the runway on their tummies with arms outstretched like wings.
Travel Shares

Why is Rex smashing the Qantas share price on Tuesday?

Shares in Regional Express are outperforming its bigger rival today.

Read more »

A group of travellers run excitedly to the airport gate.
Travel Shares

Qantas share price lifts despite airport mayhem

Why did the ASX travel share rise today?

Read more »

A female cabin crew member on a place looks like she has a headache.
Travel Shares

Why did the Webjet share price trail the ASX 200 in July?

Let's find out.

Read more »